San Miguel is a bustling neighborhood in the center of Manila, home to many of the jeepney drivers and low-wage laborers that make up the city’s poor. A cash-based community with few options for formal savings, Mercy Corps partner BanKO is working to provide these individuals with affordable, safe and convenient banking services using mobile technology.
Merdy is a typical case in point. She owns a sari-sari store — a small, multi-purpose convenience store common throughout the Philippines. Before Merdy had access to BanKO services, she had no bank account or formal savings. Her profits were stored in her wallet, and were often exposed to theft.
Through BanKO, Merdy is now able to guard her earnings in secure location, and she plans to use her savings to fund the growth of her business. She also received a small loan from BanKO to purchase a motorcycle taxi, which has enabled her to double her weekly income.
Up to this point, BanKO may seem like a typical small bank or microfinance outlet. However, BanKO adds extra punch in a country with thousands of small banks and microfinance institutions: it has the backing of a leading bank and mobile network operator, and a mandate to deliver banking services to the poor using mobile telecommunications channels. A joint venture between Bank of the Philippine Island (BPI) — the oldest bank in the Philippines — and Globe, a major telecommunications agency, BanKO provides affordable and formal financial services to traditionally underserved customers, using mobile technology as a channel to send and receive loans and repayments, deposits and remittances.
Here’s how it works: instead of traveling to a bank (which may be located hours away in the nearest urban area) customers can engage in remote banking on their phone through a series of simple SMS (text)-based instructions. Use of this technology translates into greater convenience, affordability and safety for the customer, and a larger reach and customer base for the bank.
“It is very convenient for me,” Merdy explained. “It is useful to use my phone.” And for a woman with two businesses and motivations to expand, convenience is a commodity in high demand.